Manorial Rights Indemnity Insurance Mortgage Company conveyancing requirements
Yorkshire Bank Home Loans and Natwest, in common with the majority of mortgage companies, set their own specific instructions when it comes to manorial rights indemnity insurance. This page sets out to enlighten residential conveyancing practitioners on the various bank solicitors panel where the title to be charged incorporates manorial rights. Lawyers are advised to familiarise themselves with the CML handbook requirements for each lender, be it Santander, Chelsea BS or Yorkshire Building Society. The information on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Godiva Mortgages and Barnsley BS as with the majority of mortgage companies, instructions are such that where manorial rights indemnity insurance is to be put on risk:
- your practice is required to disclose to the insurer all relevant information which you have acquired
- the manorial rights indemnity insurance policy must not contain terms that you know would invalidate or prejudice the interests of the bank
- your firm must explain to the borrower that the borrower must adhere to any conditions of the manorial rights indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the policy
- your firm must provide a copy of the manorial rights indemnity insurance to the borrower and explain to the borrower why the manorial rights indemnity insurance policy was effected and that additional insurance could be mandatory if there is additional borrowing against the mortgaged property
- the limit of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the manorial rights indemnity insurance policy must be effected at no expense to the lender
- the manorial rights indemnity insurance policy must be for the benefit of the mortgage company and, wherever possible, for the benefit of the borrower and any next owner or bank. Where the mortgagor will not be covered by the manorial rights indemnity insurance policy, you must advise the mortgagor of this fact.
- you must approve the terms of the manorial rights policy on behalf of the lender
| Lender | Requirement |
|---|---|
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Barnsley Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Birmingham Bank | Please contact Head of Operations to discuss (Gareth Allen) |
| Bluestone Mortgages | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Coventry Building Society | Minimum of the value of the property. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Harpenden Building Society | 110% of mortgage advance |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Molo Finance Buy to Let | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgages. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Mortgage Express | Amount of loan + 15% |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| Perenna | The higher of the purchase price or valuation. |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| RBS - Direct Line | An amount equal to the value of the property. |
| RBS - Virgin One | An amount equal to the value of the property. |
| Topaz Finance | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
Manorial Rights Contingency Insurance : Reflections
The full terms, conditions and exclusions for manorial rights indemnity insurance are explained in the policy document. Property lawyers should point the borrower to the manorial rights indemnity insurance policy document. Manorial Rights indemnity insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so it’s important to check any draft to determine that it is in order. The duration of this non-investment insurance contract is in perpetuity unless otherwise stated in the manorial rights indemnity insurance policy. Adequacy in this regard should be checked.Manorial Rights Contingency insurance: Important characteristics and benefits:
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the manorial rights indemnity insurance schedule. Manorial Rights indemnity insurance Policies are likely to cover the following- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurer
- The out of pocket expenses of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Expenses for works (including professional fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the manorial rights policy, to the extent that such costs are rendered abortive by court decision.
- Liability for damages or compensation incurred in any proceedings concerning the risks specified in the manorial rights insurance, as well as legal and associated costs.
- All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the manorial rights policy.
- Market value reduction due to the successful enforcement of the risks specified in the manorial rights insurance.
Don't forget to consider what is excluded from the manorial rights policy e.g. does the policy cover any residence that has been altered within the 12 months prior to the commencement of the policy? Are legal costs covered?
Manorial Rights Indemnity Insurance has limitations - Supplemental considerations
Manorial Rights Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that manorial rights indemnity cover will not necessarily be the right solution. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most manorial rights Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information covers to properties in England and Wales.